UPDATE 1-Progress on ECB digital currency possible next year -Le Maire

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BRUSSELS, Nov 8 (Reuters) - French Finance Minister Bruno Le Maire said on Friday there could be progress next year on the feasibility of a digital currency backed by the European Central Bank, but acknowledged the plan was for the long term and faced challenges.

Plans for a European public digital currency have begun emerging after social media giant Facebook announced in June its blueprint for Libra, a private digital currency, which spooked regulators who have since raised concerns and said Facebook's project could be banned.

A public digital currency would represent an alternative to Libra and other private projects, and could reduce costs of international transactions, which Le Maire said were too high.

Acknowledging it would take time to develop a European public digital currency, he told a news conference in Brussels: "The fact that is for the long term does not prevent us from working and having results next year."

The potential impact of introducing such a digital currency, especially for banks, and on the conditions for having it in place could be clarified next year, he said.

In separate comments, he also backed proposals from Germany's Finance Minister Olaf Scholz to link progress on an Europe-wide bank deposit guarantee scheme to banks' reduction of their exposure to sovereign debt. (Reporting by Francesco Guarascio zfraguarascio; Editing by Alison Williams and Catherine Evans)